Job growth, wage growth and business growth are all lively, and inflation has steeply fallen from its 2022 highs. But consumer sentiment, while improving, is still sour.
One reason may be sticker shock from some highly visible prices — even as overall inflation has calmed. The cost of car insurance is a key example.
Motor vehicle insurance rose 1.4 percent on a monthly basis in January alone and has risen 20.6 percent over the past year, the largest jump since 1976. It has been a huge hit for those driving the roughly 272 million private and commercial vehicles registered in the country. And it has played a part in dampening the “mission accomplished” mood on inflation that was bubbling up in markets at the beginning of the year.
According to a recent private-sector estimate, the average annual premium for full-coverage car insurance in 2024 is $2,543, compared with $2,014 in 2023 and $1,771 in 2022.
That spike has a variety of causes, but the central one is straightforward: Cars and trucks are pricier now, so insurance for them is, too.